This article examines Australia's trade in crude petroleum over the past decade, and gives particular focus to the impact of recent increases in the international oil price.

A range of information on Australia's exports and imports of crude petroleum is provided in this article. These include the values, volumes and average unit values for merchandise exports and imports; chain volume measures; and details of trade with Australia's major trading partners.

The data in this article relate to SITC 333: Petroleum oils and oils obtained from bituminous minerals, crude. Oils other than crude are not included. Throughout the article, this commodity is referred to as crude petroleum. SITC 333 corresponds to Harmonised System (HS) 2709.00.

Exports and imports are both shown in this article on a free on board (fob) basis. Elsewhere in this publication, imports are shown on a Customs value basis. While the data are therefore not strictly comparable, the differences between the two bases for crude petroleum is negligible.

VALUE OF EXPORTS AND IMPORTS

Between 1990-91 and 1998-99, the value of exports of crude petroleum remained relatively stable, fluctuating between a low of $1,350 million in 1993-94 and a high of $1,973 million in 1997-98. Over the same period, the value of imports of crude petroleum rose from $1,501 million to $3,603 million (a 140% increase), with a peak of $3,836 million in 1996-97.

While positive balances of trade occurred in 1990-91 and 1991-92, the balance of trade in crude petroleum has since been negative in all financial years, reaching a peak deficit of $2,003 million in 1998-99.

GRAPH 1: ANNUAL VALUE OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

Exports of crude petroleum have decreased as a proportion of total merchandise exports, from a peak of 3.4% in 1990–91, to a low of 1.9% in 1998–99. On the other hand, imports of crude petroleum have increased as a proportion of total merchandise imports, from a low of 3.1% in 1990–91 and 1991–92, to a peak of 4.9% in 1996–97.

TABLE 1: ANNUAL VALUE OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

Exports of crude petroleum

Proportion of merchandise exports

Imports of crude petroleum

Proportion of merchandise imports

Balance of trade

Financial year

$m

%

$m

%

$m

1990-91

1,779

3.4

1,501

3.1

278

1991-92

1,590

2.9

1,577

3.1

13

1992-93

1,801

3.0

2,256

3.8

-455

1993-94

1,350

2.1

2,273

3.5

-923

1994-95

1,644

2.5

2,468

3.3

-824

1995-96

1,547

2.0

2,849

3.7

-1,302

1996-97

1,876

2.4

3,836

4.9

-1,960

1997-98

1,973

2.2

3,315

3.7

-1,342

1998-99

1,600

1.9

3,603

3.7

-2,003

In recent quarters there has been strong growth in the value of both exports and imports of crude petroleum. Over the four quarters to March quarter 2000, the value of exports of crude petroleum totalled $3,491 million, 118% higher than the 1998-99 total. In the same period, the value of imports of crude petroleum totalled $5,106 million, 42% higher than the 1998–99 total.

The value of imports fell in the March quarter 2000, but remained at an historically high level. In the March quarter 2000, the balance of Australia's merchandise trade in crude petroleum became positive for the first time in its recent history.

Increases in the international oil price are the main determinant for the trends observed. Other factors include the commencement of production from significant new fields, some switching by Australian refineries to source crude petroleum from domestic production rather than imports, and the fall in the exchange rate for the Australian dollar against other currencies.

GRAPH 2: QUARTERLY VALUE OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

TABLE 2: QUARTERLY VALUE OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

Exports of Crude Petroleum

Imports of Crude Petroleum

Balance of trade

Quarter

$m

$m

$m

September 1998

506

851

-346

December 1998

410

933

-523

March 1999

328

791

-463

June 1999

356

1,027

-670

September 1999

672

1,262

-589

December 1999

960

1,602

-642

March 2000

1,503

1,215

288

VOLUME OF EXPORTS AND IMPORTS

The unit of quantity used to record trade in crude petroleum is litres. Between 1990–91 and 1998–99 the volume of exports of crude petroleum increased by 3,649 million litres (42%). Import volumes grew much more strongly over the same period, rising by 19,894 million litres (245%). In 1990–91, Australia exported more crude petroleum (8,734 million litres) than it imported (8,132 million litres). Since that time, the volume of imports on a financial year basis has exceeded that of exports, with the gap generally growing over time.

GRAPH 3: ANNUAL VOLUME OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

TABLE 3: ANNUAL VOLUME OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

Exports of Crude Petroleum

Imports of Crude Petroleum

Financial year

million litres

million litres

1990 - 91

8,734

8,132

1991 - 92

8,794

9,975

1992 - 93

9,765

13,056

1993 - 94

8,940

15,897

1994 - 95

10,879

16,768

1995 - 96

10,074

18,752

1996 - 97

11,083

22,212

1997 - 98

13,189

22,257

1998 - 99

12,383

28,026

The volume of exports of crude petroleum decreased steadily during the first half of 1999, before registering strong growth. The March quarter 2000 volume was 5,809 million litres, the highest quarterly figure on record. After being steady for several quarters, the volume of imports of crude petroleum decreased in the March quarter 2000 to 4,792 million litres. This was the lowest quarterly figure since September quarter 1996.

GRAPH 4: QUARTERLY VOLUME OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

TABLE 4: QUARTERLY VOLUME OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

Exports of Crude Petroleum

Imports of Crude Petroleum

Quarter

million litres

million litres

September 1998

3,943

6,506

December 1998

3,291

7,322

March 1999

2,791

7,202

June 1999

2,357

6,995

September 1999

3,477

6,965

December 1999

4,089

7,002

March 2000

5,809

4,792

AVERAGE UNIT VALUES FOR EXPORTS AND IMPORTS

Information on the prices paid and received for exports and imports of crude petroleum is not included on Customs records. However, by dividing the value of exports and imports by the respective trade volumes, a rough price measure (average unit value) can be derived. Use of average unit values calculated in this manner is often subject to a number of serious limitations as a measure of price change over time.

Users who are interested in price movements in export and import commodities should refer to Export Price Index, Australia (Cat. no. 6405.0) or Import Price Index, Australia (Cat. no. 6414.0). These indexes are currently being reviewed and an Information Paper on the review was issued in November 1999 — Information Paper: Review of the Import Price Index and Export Price Index, 1999 (Cat. no. 6424.0).

In paragraphs 7.13 to 7.15 of the Information Paper the possible uses and limitations of average unit values are discussed. Paragraph 16.13 of the System of National Accounts, 1993 (SNA93) makes similar comments.

Average unit values suffer from limitations as price estimators for commodities that are not homogeneous and are likely to be affected by changes over time in compositional mix or quality. For basic commodities in the mining and agricultural sectors, these limitations are generally considered to be less severe.

The average unit values (cents per litre) for exports and imports of crude petroleum decreased over the period 1990–91 to 1998–99, by 37% and 30% respectively. These movements largely reflect changes in international oil prices over this period.

GRAPH 5: ANNUAL AVERAGE UNIT VALUES OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

TABLE 5: ANNUAL AVERAGE UNIT VALUES OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

Exports of Crude Petroleum

Imports of Crude Petroleum

Financial year

cents per litre

cents per litre

1990 - 91

20.4

18.5

1991 - 92

18.1

15.8

1992 - 93

18.4

17.3

1993 - 94

15.1

14.3

1994 - 95

15.1

14.7

1995 - 96

15.4

15.2

1996 - 97

16.9

17.3

1997 - 98

15.0

14.9

1998 - 99

12.9

12.9

International oil prices increased dramatically during the course of 1999 and this is reflected in the average unit values for quarterly exports and imports during this period. Between March quarter 1999 and March quarter 2000, the average unit value for exports rose from 11.8 to 25.9 cents per litre (119%). Over the same period, the average unit value for imports rose from 11.0 to 25.4 cents per litre (131%).

GRAPH 6: QUARTERLY AVERAGE UNIT VALUES OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

TABLE 6: QUARTERLY AVERAGE UNIT VALUES OF EXPORTS AND IMPORTS OF CRUDE PETROLEUM

Exports of Crude Petroleum

Imports of Crude Petroleum

Quarter

cents per litre

cents per litre

September 1998

12.8

13.1

December 1998

12.5

12.7

March 1999

11.8

11.0

June 1999

15.1

14.7

September 1999

19.3

18.1

December 1999

23.5

22.9

March 2000

25.9

25.4

CHAIN VOLUME MEASURES FOR EXPORTS AND IMPORTS

The various measures included in this article so far are either obtained directly from Customs records or derived from them. The measures used to assess volume and price changes suffer from a number of limitations, although these are considered to be relatively less significant for crude petroleum, than for many other commodities.

The ABS produces chain volume measures and price indexes which provide conceptually better measures of volume and price change. For exports and imports the measures normally published are at a more aggregated level of classification. For this article, previously unpublished chain volume measures and price deflators for crude petroleum are included.

Current price series for exports and imports reflect the influences of both volume and price changes. Chain volume measures provide estimates of the changes in the value of the series, after the direct effects of price changes have been eliminated i.e. they only reflect the volume changes.

The chain volume measures of exports and imports of crude petroleum appearing in this article are annually reweighted chain Laspeyres indexes referenced to current price values in a chosen reference year, currently 1997–98.

For further information on chain volume measures refer to the Information Paper: Australian National Accounts, Introduction of Chain Volume and Price Indexes (Cat. no. 5248.0), which was released in March 1998.

The series included in this article commenced in September quarter 1995. The series show broadly similar movements for values, volumes and prices, for both exports and imports of crude petroleum, to those outlined earlier in this article for the period most affected by the international oil price rise.

Between March quarter 1999 and March quarter 2000, the value of exports (current prices) rose 358%, the implicit price deflator for exports rose 119%, and the exports chain volume measure rose 108%. Over the same period, the value of imports (current prices) rose 54%, the implicit price deflator for imports rose 128%, and the imports chain volume measure fell 32%.

In 1998–99, the 5 major countries of destination for Australia's exports of crude petroleum were the United States of America, Taiwan, Japan, Republic of Korea and Singapore. Taken together these accounted for 81% of exports to all countries. For the same period, the 5 major countries of origin for Australia's imports of crude petroleum were Indonesia, Viet Nam, Papua New Guinea, New Zealand and Saudi Arabia. Taken together these accounted for 80% of imports from all countries.

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